Starting a new business? Get 40% off our accountancy services for 3 months! 😀

x

Hey, small business owner – congratulations on doing so well that you’re ready to start employing staff. That’s an epic milestone which ought to be celebrated! Before the fun and games can commence, here’s what to do before taking on staff for the first time.

Can I afford to take on staff?

Before you hire anyone, talk to your accountant! Go through the numbers, right down to the smallest decimal, to pinpoint what is reasonably affordable to you right now. Your recruitment wish list might feature somebody with decades of experience and a contact list as long as their arm. Just remember that those people usually comes with a high price tag, and your business might not even be ready for them just yet.

As an employer, your business finances also need to accommodate more than just the employee’s salary, too. Don’t forget to consider things like:

Before committing to any contracts, make sure you’ve covered all bases and how they will impact your cash flow. Use our free online tax calculator to work out how much it costs to employ someone.

Talking of pension contributions, you’ll also need to think about a workplace pension scheme. Read our employer’s guide to auto enrolment for pensions. 

Tell HMRC that you’re about to become an employer

You’ll need to keep HMRC in the loop about your change of status from business owner to employer. Register as an employer up to four weeks before you actually pay your new recruit. It then becomes your full responsibility to make the appropriate PAYE deductions and pay them on to HMRC.

Complete a new starter checklist for each new member of staff, and set them up on your preferred payroll system. You’ll need to let HMRC know of any relevant payments and deductions on or before each payday by making a Full Payment Submission (FPS). Again, a qualified accountant or payroll officer will be able to help you with all of this.

You will need Employer’s Liability insurance

First-time employer 101 – make sure you’ve got some good Employer’s Liability insurance sorted before you even think about setting somebody up with a desk. Employer’s Liability insurance is required to cover you for at least £5 million although most reputable providers extend this to £10 million.

Do all the necessary checks on your new recruit

The first check to carry out before hiring anybody is their right to work in the UK. You could end up with a hefty £20,000 fine if you fail to check that your new recruit is eligible to work in the UK.

Depending on the nature of the role you might also want to carry out:

Our team of friendly online accountants and payroll clerks are on hand to guide you with your new payroll needs. Call 020 3355 4047, email info@theaccountancy.co.uk, or get an instant quote online for outsourcing your payroll.

About The Author

Suzanne Goodier-Dodson

I'm a Payroll Manager with a degree in Mathematics, responsible for overseeing every aspect of payroll for our clients. In my spare time, I love to travel and going to gigs. Read my Staff Spotlight.

More posts by this author
guest
0 Comments
Inline Feedbacks
View all comments

Read more posts...

Architects and Tax

Architecture is a highly diverse sector when it comes to tax. It’s partly down to the type of businesses that carry out…

Read More

June 2022 Client of the Month: Manea Kella

This month we spoke to Adrian Manea, architect and director at Manea Kella, a London based RIBA Chartered architecture and interior design…

Read More

Succession Planning for Business Owners: What Comes Next?

When you own a business, it’s extremely normal to feel like you’re surviving one day to the next – ‘winging it’, as…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.

Bookkeeping

You only need this service if you want us to complete the bookkeeping on your behalf.

Would you prefer to complete your own bookkeeping?

Yes
No

Call us on 020 3355 4047 if you’re not sure.